I am the former Co-CEO of KP Media, a leading Publisher in Ukraine. In addition to being the leading news organization in Ukraine (Korrespondent, Kyiv Post), we also owned the largest online business, Bigmir.net. I'm now back in the US, consulting and speaking in the areas of Digital Marketing and Digital innovation. You can find my website at www.DigitalTonto.com and follow me on Twitter @DigitalTonto.

6 Reasons Why I'm Bullish On Microsoft

It’s hard to remember the days when Microsoft seemed so dominant that it took an antitrust suit to curb their power. Lately, it seems like they can’t do anything right, or at least that’s what many say. Don’t believe it. Microsoft’s star is on the rise again.

My fellow Forbes contributor Adam Hartung makes a vigorous case for Microsoft’s impending demise. He says that their days as a monopoly are over and now they can’t compete.

After all, Windows 8 and Surface were their last chance and they came up short. New businesses, like their online and gaming divisions, aren’t pulling in the profits they need either. At this point, he feels, there’s not much left for Microsoft to do but admit defeat.

It’s a compelling story and one you hear a lot these days, but I’m not buying it. What I see is classic Microsoft, a company that has always been slow out of the starting gate, clumsy with its marketing, but a master of tech strategy’s long game.

Here are 6 reasons that Microsoft is still a major force to contend with:

1. Financials: Okay, first the obvious. Microsoft, by any standard is a great business. We’re talking about a company with over $60 billion in cash and whose 35% operating margins throw off about $20 billion in earnings a year. Further, according to their recent earnings release, their business continues to grow at a fast clip.

If Microsoft is a business in crises, most companies would kill to have that kind of crises!

2. Windows 8: A lot of people have been knocking Windows 8. The launch didn’t create a barrage of upgrades, bad reviews abound, consumers don’t understand the interface and, let’s face it, Microsoft just sucks anyway! They are a desktop company in a mobile age.

Well, not exactly. Once you start parsing the reviews, it becomes clear that the biggest complaint is that Windows 8 is a lousy desktop interface (it is – it was largely designed for touch). On the other hand, as a mobile operating system it generally gets high marks and, even on PC’s, many have noted that Windows 8 significantly improves performance even on Windows 7 applications.

Finally, it must be said that Microsoft has achieved something that no one else has: A unified platform for ubiquitous computing across all device platforms. That’s nothing to sneeze at.

3. Mobile: Ballmer and company clearly understand that the desktop market is shrinking, which is why they are making a hard pivot to mobile. It’s too early to tell how it will all go, but Nokia’s recent earnings report indicates that there’s some serious potential there.

While we like to think of smartphones as a mature market, it really isn’t. Penetration in the US is only 55% and it’s roughly the same in Europe, so there is still a lot of room to grow. There is also great opportunity in emerging markets, where mobile phones are often the primary access point to the Internet. Microsoft just announced a partnership with Huawei to sell a low cost model in Africa.

My take is this. The battle here is not between Microsoft and Apple, but Microsoft and Google. Managing OEM relationships is a core Microsoft competency, while Google is still new to the game. I also have the feeling that Google’s heart isn’t really in it. They want to create the next big thing, not quibble with OEM’s.

I give the advantage to Microsoft and, besides, with the current market composition, a tie goes to Microsoft anyway.

4. The Enterprise Market: Microsoft has never been a great consumer company (which one reason why it’s so hard for tech pundits to get excited about them), but they are a great enterprise company.

Their Servers and Tools division continues to grow at about nice clip (about 10%) and I don’t know any business executive that could function without Office. No serious competition in sight either.

5. The Web of Things: While SoLoMo has been driving tech the past few years, the future belongs to the Web of Things and nobody is as well positioned as Microsoft.

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I think a lot of people feel the same way you do Roland. However, when you start trying to share applications and content across the two operating systems (iOS and OSX) the seams start to show (HBO GO is a prime example). As TV becomes further integrated in, the problem will only get worse.

Again, not knocking Apple (in fact, I own the stock), but Microsoft has accomplished some important things with Windows 8 and it should get a whole lot more credit than it does.

Anyone who thinks iOS is a replacement for Windows isn’t working hard enough. iOS is good at what it does–surf the web & play Angry Birds. It’s very limited at just about anything else.

Stop believing the i-hype. There is no post-PC era. The PC sphere has just expanded to include more devices. We didn’t abandon trains when cars were developed, and we didn’t abandon cars once we learned how to fly.

Protect Apple at their peril. They’ve only been at the top for a couple years, and already they’re losing their lead to Android.

please explain “A unified platform for ubiquitous computing across all device platforms.” If all you’re talking about is the user interface, Apple has the same thing and has had it longer than Microsoft. The iPhone was instantly usable by Mac users and Windows users alike, if you want to go that far. If you’re talking about the underlying OS, it simply isn’t true. The phone, tablet, and PC code are all different, to the extent that Office won’t run on two of the three platforms. People, including Ballmer keep repeating this claim and I’m mystified by it.

Desktop: As you said, Microsoft is mainly about corporate business. Windows 8 sucks for corporate applications. Companies won’t upgrade to it. But it’s even worse. It’s quite possible that companies move towards Open Source on the desktop. Have you heard about what’s happening in Europe? Governments are moving towards Open Standards. Microsoft documents formats are out, and Open Documents formats are in. From this to Open Source is a small step. See for yourself: http://www.zdnet.com/uk/open-standards-now-mandatory-across-whitehall-7000006807/ http://www.computerweekly.com/blogs/public-sector/2012/11/-tablemytable-border-collapsec.html

Mobile: No one buys Windows Phones. And no one develops for it. All major applications don’t have versions for Windows Phones. The London Olympic Games had official apps for iOS and Android, but not for Windows Phones. Same for the BBC iPlayer, and many others. Check it out: https://iplayerhelp.external.bbc.co.uk/help/mobile_iplayer/Windows_phone_app http://www.businessinsider.com/microsoft-publishes-75000-windows-phone-apps-2012-12

Enterprise: Servers?! Are you serious?! The server business is all UNIX-like and growing. And the Office suite is about to lose a lot, from both Open Source (due to Open Standards) as well from Google Apps. Take a look: http://en.wikipedia.org/wiki/Usage_share_of_operating_systems#Servers (server+mainframes+super) http://www.businessweek.com/articles/2012-10-15/surprise-there-may-be-a-business-in-google-apps http://www.nytimes.com/2012/12/26/technology/google-apps-moving-onto-microsofts-business-turf.html?_r=0 http://talkincloud.com/cloud-services-providers/google-apps-enterprise-cloud-revenues-1b-2013

IoT: Internet of Things is all Google. Why? Because IoT is all about Open Source/Standards. It won’t work any other way. Check BMW Open Source Project and you’ll see what I mean: http://www.bbc.co.uk/news/technology-19152751

Cool: Oh boy… There is nothing cool about Microsoft. Microsoft is the most dull company in the world. If IoT is all about Google, cool is all about Apple.

Microsoft is a mess: http://gra-zen.nuno.net/2012/12/microsofts-broken-compass.html

Greg, I agree with you. Your statement about: “A unified platform for ubiquitous computing across all device platforms” is the most important one. Microsoft has a huge leg up here, and despite what the Microsoft detractors may say, no other company, not Apple, not Google, is anywhere close. In the end, the company that executes the best integration strategy will dominate. In my view, Microsoft is the leader if you look carefully at everything they are doing.